Northwest NEWS

May 25, 1998

Council reconsiders admissions tax exemption

by Andrew Walgamott
Staff reporter

WOODINVILLE--Chateau Ste. Michelle, Redhook Brewery and Columbia Winery are rising up as one against a proposal to extend the City of Woodinville's five percent admissions tax to their events. On June 1, the City Council is scheduled to consider repealing the exemption businesses in the city's Tourist District have had since the tax was passed last May. While Woodinville stands to double its admissions tax take if the exemption is negated, all three beverage makers say charities, customers and they themselves will be hurt, and that will in turn hurt the city.

Dismay and warnings
High ranking officials from all three businesses fired off letters of protest to the city that read as mixtures of dismay and veiled warnings. Allen Shoup, president and CEO of Chateau Ste. Michelle, argues that the tax is aimed at their summer art schedule. "Based on last year's ticket revenues, you would be taking over $100,000 directly from charity," Shoup wrote May 4. Proceeds from their series benefit Pacific Northwest Ballet, the Seattle Symphony and Children's Hospital, according to Katie Sims, Ste. Michelle communications director.

Dave Mickelson, Redhook executive vice president and chief operating officer, writes that the businesses shouldn't be taxed for parks when they already provide park-like settings at their facility for the public to enjoy. "Redhook has approximately 22 acres in Woodinville, most of which are either left natural (wetlands, buffers, open space) or improved for passive recreation for the general public," Mickelson wrote May 5. But City Manager Roy Rainey noted that those areas were required to be preserved per code rather than as acts of benevolence.

Still, there is concern with the City Council's increasing interest in new taxes. Last January, the council passed what Patrick M. Duff of Associated Vintners termed a "substantial utility tax." Duff is vice president of finance for Vintners which operates Columbia Winery. The city-wide utility tax on gas, electricity, telephones and garbage will go to fund road construction near the downtown development. "While we are not about to move out of the area for the recent addition of taxes, we do take the tax environment into consideration when we decide to expand our facilities," Duff wrote May 15. He said that within the next three years, he is anticipating the need for additional space. "Unfortunately, it will now be necessary to take a hard look at the future tax environment in Woodinville for any growth plans," Duff warned.

Mickelson claimed, "To be charged this tax would require Redhook to consider withdrawing our support of local community events, such as the 4th of July sponsorship in an effort to offset the increased cost of doing business in Woodinville."

Tax aids parks
The City Council earmarked the admissions tax for parks funding in passing it last year. The tax was mainly aimed at the new theater and could collect an estimated $100,000 from movie-goers over the next year. A different make-up of the City Council exempted the tourist district then. But taxing the district's events could net another $100,000, the city estimated last week. That's a lot of money for a city with a lot of wants and pressing needs but without the political will to raise property taxes.

Councilman Randy Ransom brought the repeal up for discussion after the council had to borrow against future admissions tax revenues when the city found it would cost more than anticipated to build Wilmot Gateway Park. While that brushfire has been taken care of, Ransom says the city needs to be looked at "holistically" in developing a funding strategy for the aggressive Parks, Recreation and Open Space Plan. "If we're going to hold the line on property taxes, we're going to have to look elsewhere for funding sources," he said.

Ransom stressed the issue was still in the preliminary fact-finding stages. It will be discussed by the City Council's Finance Committee this Tuesday at 6 p.m. before going to the full council. Ransom said questions like "Is it something we want to do? What are the revenues we're talking about? Is it worth it?" would be explored.

Council non-committal
Other members of the council were non-committal last week. "I don't know the sentiment on the council. Once we see the parks needs, there may be sentiment for it," said Mayor Don Brocha, speaking to the capital improvement plan they saw this week. Though Councilwoman Barbara Solberg said she wanted "to hear all sides before I vote," she noted that Ste. Michelle has basically provided park services for a number of years free of charge. "You don't have to pay to go on their grounds. You can play frisbee, or just sit around," Solberg said.

Councilwoman Marsha Engel said she was undecided, but said if she voted now it would be to extend the tax across the city. "It's really inequitable the way it is now. The theater is taxed, but the wineries and brewery aren't. That's not the way a city should work," Engel said.

In the middle is Woodinville Parks Director Lane Youngblood. "All of us are on the same page, enhancing the quality of life for the residents here and making Woodinville an inviting place for visitors. The question is how do we go about funding our needs," she said. Solberg and Brocha expected to be lobbied hard by the wineries and brewery when the issue comes up.